2. Environmental impacts

2.1 Climate and CO₂

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Impacts

Our day-to-day activities result in CO₂ emissions. We burn fuels to heat our buildings and power our fleet, purchase electricity to charge our cars and we buy airline and railway tickets to travel to international clients and attend international network meetings. We also have suppliers who emit CO₂ to produce and transport their goods or render their services to us. The CO₂ we emit contributes to global warming which results in widely known environmental impacts such as accelerated sea level rise, more intense heat waves, loss of biodiversity, and much more. This indirectly impacts the wellbeing and safety of people around the globe, but also the continuity of organisations. Extreme weather events can significantly impact sites and supply chains. This can not only jeopardise the continuity of our clients and thus impacts our engagements, but it also affects suppliers that provide goods or services for the operations of our own organisation.

Our Strategic Impact Assessment has revealed that the impact materiality of our CO₂ emissions is limited. This is partly due to the nature of our business, and partly because of our success in reducing carbon emissions to date. However, the potential financial impacts of Climate and CO₂ are considerable. These impacts are twofold. In the short term, failing to meet the expectations of our stakeholders can result in loss of business and failure to attract the right talent. With the evolving emphasis on Scope 3 emissions, we see a growing number of clients who take supply chain emissions into account when selecting their business partners and awarding contracts. Failure to meet their criteria in the area of  Climate and CO₂ can lead to loss of business. Likewise, we see that many young professionals are concerned about climate change and want to work for businesses that are part of the solution rather than a cause of the problem. Being proactive in the area of Climate & CO₂ can increase the attractiveness of Deloitte as an employer and safeguard our continued access to the labour market.

In the longer term, Climate & CO₂ potentially can hurt our clients’ businesses and with that, our ability to service them. Clients who are asset-heavy or who have invested heavily in asset-heavy industries (such as banks and institutional investors) can especially be affected by the consequences of climate change as they stand to lose both production capacity and value in case their installations are damaged or destroyed by climate-related natural disasters, such as floods or storms. On a larger scale, this can lead to a business continuity risk and with that, a risk to the continuity of our services to such clients.

As many companies are becoming actively aware of climate-related risks, and with that the need to transition away from a fossil fuel based economy, there is also a good opportunity for Deloitte to help clients in mitigating climate risks and helping them to become more responsible and adaptive businesses. We help an increasing number of clients with the environmental challenges through our MDM Sustainability, a cross-business cooperation that brings together the necessary experience and competences from our audit and advisory businesses.

Governance

Deloitte feels responsible to do what is necessary to halt climate change. To reduce the negative impact from our business on global warming, DTTL has adopted the WorldClimate  programme. The objective of WorldClimate is to become net zero for all Scope 1, 2 and 3 CO₂ emissions by Deloitte worldwide. This ambition is to be achieved by reducing where we can, and compensating in a meaningful way where we must, and is supported by a number of science-based targets to be achieved by 2030:

• Reducing our business travel emissions by 50% per FTE from 2019 levels (realisation 2022/2023: 49%);

•  Sourcing 100% renewable energy for our buildings (realisation 2022/2023: 88%);

• Converting 100% of our fleet to hybrid and electric vehicles (realisation 2022/2023: 46% fully electric);

• Engaging with our major suppliers with the goal of having two-thirds of them adopt science-based targets for  carbon reduction within five years;

• Investing in meaningful market solutions for emissions we cannot eliminate.

Other elements of WorldClimate are Embed sustainability, Empower individuals, and Engage ecosystems.

As we had already set ambitious CO₂ emission targets in our Connect for Impact strategy, we have fully embraced the WorldClimate programme and have even been able to commit to carbon neutrality for housing and mobility by 2025. This is five years ahead of the DTTL target. For other indirect emissions we follow the timeline defined by DTTL.

To realise the reduction of our CO₂ emissions we have set up a robust governance structure for internal sustainability. We have a dedicated Internal Sustainability Team in place that reports directly to the Executive Board, and have created a Sustainable Operations Team that consists of various topic owners (housing, fleet, travel, IT, procurement, talent and communications) to design and implement policy. Our businesses are connected through a Climate Champions Network, a group of passionate sustainability adepts from across our businesses. We have also assigned senior leaders from each business to form a group of Sustainability Operational Excellence Leads. This group is responsible for embedding sustainable practices in the daily operations of their businesses.

Activities in 2022/2023

Mobility

Our mobility policy offers our employees the choice between a leased car, a cash option or public transport. When employees opt for a leased car, we encourage them to lease energy efficient cars by including the energy costs in the available lease budget. Furthermore, all contracts of fossil fuel cars (including hybrid cars) will not extend beyond 2025 in order to phase out the use of fossil fuel powered vehicles and transition to fully electric or hydrogen powered cars. So far, the mobility policy has proved to be effective as around 50% of our fleet now is fully electric. However, the global semi-conductor shortage and increasing demand for electric vehicles remain challenges that continue to have an effect on the pace of our transition.

Our business travel policy outlines the conditions that we have set for international travel, both in terms of approvals designed to prevent unnecessary travel - for example by switching to virtual and or hybrid meetings -, and of travel choices to prevent unnecessary CO₂ emissions and costs. In line with our reduction ambitions, we prefer rail instead of flying for short international travel where practical, and have defined additional guidance concerning travel classes on international flights.

Housing

For housing, we aim to rent office space in leading energy-efficient buildings. Examples are our office in Amsterdam (‘The Edge’), which has a BREEAM Outstanding certificate, and our office in Rotterdam (‘Maastoren’). Where we are the main tenant, we purchase renewable energy. We have joined the energy marketplace of Groendus for our Eindhoven and Utrecht offices as well as our data centre in Amsterdam. This energy marketplace matches supply and demand for sustainable energy sources. Where we are not the main tenant and the energy supplied is not ‘green’, we aim to offset our share in the energy related emissions. The same goes for the electricity we purchase to power our electric vehicle fleet. We continuously work to optimise our buildings, and are therefore actively implementing the ‘Better Buildings Toolkit’ that has been developed by DTTL.

In order to track whether our CO₂ emissions decline as a result of our actions and policies, we have developed a CO₂ Emissions Dashboard for fleet and air travel. This dashboard is updated every quarter with the latest data we receive from our suppliers. The dashboard showcases CO₂ emissions per business, fiscal year and even per cost centre. It is accessible to all our employees not only in order to provide transparency but also to stimulate our employees to change their own behaviour and choices. It also feeds into our strategic dashboard, allowing us to discuss our performance against target within our Leadership. As our CO₂ reduction target is incorporated in our Connect for Impact strategy, it is part of the criteria for flexible reward of our Executive Board. We have also developed a Carbon Forecasting Tool to forecast the effects of our policies on our CO₂ emissions. This tool has been built in Anaplan and is integrated with other planning tools of our organisation.

Deloitte NSE has compensated the CO₂ emissions from 2021/2022 for all NSE geographies by investing in a number of certified carbon avoidance and renewable energy projects from third parties. Once total CO₂ emissions for Deloitte NSE in 2022/2023 have been verified, NSE will buy credits to compensate these. We have started our own nature based carbon storage project in the Dutch Caribbean where we are piloting carbon sequestration by replanting mangroves (see also paragraph 5.1 of this annex).

Sustainable delivery and personal footprint

To promote the sustainable delivery of our services, Deloitte NSE has created the Sustainable Delivery Framework. This framework contains background information on climate change to empower our people to start and conduct meaningful conversations with our clients as well as a number or concrete tools. Examples of these tools are the carbon calculator that enables our engagement teams to predict and mitigate their engagement related carbon emissions up front and discuss these with their clients, and the sustainable events guide, a tool that contains practical advice on how to organise sustainable client events.

Next to the introduction of the Sustainable Delivery Framework, we have introduced GiKi Zero, a tool that enables our people to calculate, track and reduce their own personal carbon footprint, offering advice and examples of actions they can take to live more sustainably.

Both the Sustainable Delivery Framework and GiKi Zero are facilitated by our Climate Champions Network.    

Certification

In April 2023, we obtained level 3 certification under the CO2 Performance Ladder certification scheme. We have disclosed the certificate and the supporting documentation on our public website .

Results

As expected, our carbon footprint has increased in 2022/2023 as compared to our previous financial year. This was to be expected as 2022/2023 was the first full year that was not affected by COVID restrictions. We have seen an increase in emissions both for housing and for mobility. This is caused by increased use of our offices and more commuting and physical meetings with colleagues and clients. Nonetheless, we are still far below pre-COVID levels and believe we remain on track to achieve our WorldClimate objectives.

Table 01: Total Greenhouse Gas Emissions per scope

* Our Scope 3 emissions consist of purchased goods and services, and travel related activities (such as hotel stays, rental cars, reimbursed mileage). They are to a large extent calculated by DTTL and NSE on the basis of spend. The purchased goods and services data for 2022/2023 was not available in time for inclusion in and review of the PDF of our report. 

 Table 02: Greenhouse gas intensity

* Because 'Purchased goods and services' are not included in our data for 2022/2023, the GHG intensity for this financial year cannot be compared to previous years. 

Table 03: Housing

Table 04: Mobility

Going forward

For 2023/2024, we have planned to initiate or continue the following activities:

• Our insight into our CO₂ emissions and ability to forecast our CO₂ emissions through our Carbon Forecasting Model allows us to make adjustments to our policies where needed. We will therefore continue to closely monitor our CO₂ emissions in the upcoming year.

• To obtain a better understanding of our climate adaptation risks, we will work together with our risk specialists in quantifying our exposure to business continuity risks as a result of climate change.

• In order to prepare for future legislation and in anticipation of increasing client demand as a result thereof, we will define ways to strengthen our sustainability due diligence, working with leading platforms in this area. 

• We want to improve our insights in Scope 3 emissions. To this end we aim to include commuting and working from home in our Scope 3 emissions and investigate the possibility of measuring our Scope 3 impacts downstream.

• We want to further integrate internal sustainability in the (internal and external communication) activities of the MDM Sustainability, capturing the learnings from our own journey to improve our client sustainability services.

• We want to strengthen engagement by better utilizing the potential of our internal Climate Champions Network, educating our people in the use of the Sustainability Delivery Framework and GiKi tooling. 

2.2 Other environmental information

In this section, we disclose information about our generation and disposal of waste. We choose to do so because there is a clear connection between carbon emissions reduction and the prevention and recycling of waste.  Although we do manage waste, we have not set targets for reduction or recycling yet as we do not deem our impacts as a result of water and waste to be material at present.

Table 05: Waste